Despite the suggestion in the name, it is not strictly a precise list of top 500 US companies by market capitalization. Regardless, the S&P 500 index is seen as one of the best assessments of a prominent American firm’s performance. A healthy S&P index rating usually points to a strong economy in bearish territory.
Individual investors cannot directly invest in the S&P 500 because it is an index of companies. However, they can invest in a fund that tracks the index and uses it as a benchmark that measures its performance. In 2020, more than $5.4 trillion was invested in assets tied to the performance of the index.